Saturday, April 13, 2024

Sony Leaks: CEO Asked for Memo on How to Take Record Company All Digital


The leaked Sony files on Wikileaks are pouring out odd sorts of information. For instance: Sony CEO Michael Lynton asked Dave Goldberg, head of San Francisco based consulting company Survey Monkey, if it were possible to make Sony Music go all digital. This was just last summer, and not a totally inconceivable idea given that streaming now exceeds CD sales.

Goldberg, who’s been a behind the scenes player in digital music for a while, wrote the proposal but warned Lynton of the challenges:

“If you still want to discuss this after you digest this, I am happy to find a time to come down to talk about it more. I think this amount of reinvention has rarely been done inside a public media company and it would be tough for Sony as a company to stomach the complaints from artists, employees and related parties (RIAA budget would be slashed, as an example). We would have to really decide if it was possible if you agreed with my thesis. I would also want to do a lot of actual work prior to implementing to validate the data behind the assumptions and understand the sequencing. I think it is a two-three year project to shrink the company down to the end state with a lot of noise in that period. Best, Dave.”

Goldberg’s memo envisioned a radical new world for the record biz: “The record company needs to act like a music publisher for new releases- putting up very little money but not trying to hold artists for long contract periods or to keep as much of the revenue. Advances would be $50k with a 40% revenue share after the advance. …Most fixed headcount in new releases will need to be eliminated, artists will need to be paid quickly and transparently, deals will need to be simple and fair and catalog replenishment is the only goal of the new release business. Artist contracts that have large fixed marketing costs will need to be restructured or sold off as there will no longer be headcount to do the work. New releases will be tested on consumers before added money is spent to ensure that it isn’t wasted. In short, the new release business will become like an independent label.”

Lynton and Goldberg plotted a meeting after the memo was written at the Luxe Hotel in Beverly Hills. It’s not clear from the emails if Lynton ever shared his idea with Doug Morris or anyone at Sony Music. And Lynton made sure to tell his friend: “This will remain between us.” Until now.



Roger Friedman
Roger Friedman
Roger Friedman began his Showbiz411 column in April 2009 after 10 years with Fox News, where he created the Fox411 column. His movie reviews are carried by Rotten Tomatoes, and he is a member of both the movie and TV branches of the Critics Choice Awards. His articles have appeared in dozens of publications over the years including New York Magazine, where he wrote the Intelligencer column in the mid 90s and covered the OJ Simpson trial, and Fox News (when it wasn't so crazy) where he covered Michael Jackson. He is also the writer and co-producer of "Only the Strong Survive," a selection of the Cannes, Sundance, and Telluride Film festivals, directed by DA Pennebaker and Chris Hegedus.

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